Sonic Hedgehog (Shh) signaling is important both during development and in adults. Defects in Shh signaling is associated with severe birth defects such as holoprosencephaly, while inappropriate activation of the Shh response contributes to the formation of common and deadly tumors such as medulloblastomas and pancreatic cancer. Shh is a morphogen, and it is crucial that the Shh response is precisely regulated for normal Shh-mediated patterning to occur. The central players in the Shh response are Patched1 (Ptch1) and Smoothened (Smo). Ptch1 is a potent inhibitor of Smo, and it is shown that this inhibition requires the proton-driven antiporter activity of Ptch1. It has been suggested that binding of Shh to Ptch1 inhibits the antiporter activity of Ptch1, thus releasing th inhibition of Smo resulting in its activation. This model is incomplete as demonstrated by our finding that forms of Ptch1 mutant for its antiporter activity can mediate the activation of Smo. Further complicating the assessment of Ptch1 activity is our finding that its paralog Ptch2 can mediate Shh signaling, in particular in Ptch1-/- cells. Based on our preliminary results it is hypothesized that the proton-driven antiporter activity of Ptch1/2 is required for inhibition of Smo, while independently, the loop2 of Ptch1 can mediate the activation of Smo. The first Aim will examine the extent of functional overlap between Ptch1 and Ptch2 in their ability to inhibit Smo. It will test the distinct roles of Ptch1/2 in the activation of Smo by assessing if proton antiporter-mediated inhibition of Smo and the Ptch1- mediated activation of Smo can be mediated by distinct Ptch1/2 mutants, that together can restore a normal Shh response to Ptch1-/-;Ptch2-/- cells. It is thought that the substrate of the proton-driven antiporter activity f Ptch1/2 inhibits Smo. As many proton driven antiporters mediate the efflux of their cargo, it is tested in Aim 2 if Ptch1/2 containing cells can inhibit Smo in adjacent cells and the nature of the Ptch1/2 antiporter substrate is further assessed. Besides changes in transcription, cells can also respond to Shh by chemotaxis, and under these conditions Smo acts as a G-Protein Coupled Receptor. In Aim 3 it is addressed how Ptch1/2 affect Smo activity while it relays the Shh chemotactic signal. All aims take advantage of a unique panel of mouse embryonic stem cell lines that are deficient for most combinations of Ptch1, Ptch2, Smo and Shh in addition to Disp1, Boc and Cdo. This panel of cells has been critical to demonstrate the overlapping functions of Ptch1 and Ptch2, and will provide an ideal cellular background to test the activity of Ptch1 and Ptch2 mutants without interference by the endogenous proteins. The unraveling of the events leading to the inhibition and activation of Smo will not only help gaining a deeper understanding of birth defects cause by an aberrant Shh response, but will be particularly important in providing new targets for Shh pathway inhibition when inappropriately activated in tumors.